January 29, 2014

The busy spring market is quickly approaching and some of
you may be sellers preparing to put your home on the market. One of the most important decisions you will
have to make is deciding on the asking price.
Should you choose to “push the market,” your home could end up sitting
for months, resulting in the selling process costing you more than you
anticipate. US Mortgage has come up with
some pitfalls to avoid when listing your home.

1.

Time on
the market – Overpriced homes could potentially sit on the market for
months and essentially become “stale listings.”
Buyers then begin to question this property: “Why has this been on the
market for so long?” “Is there something wrong with the listing?” “Is there
something that I don’t know or am missing about this home?” These questions will stick in the buyers’
minds and could lead them to walk away from the property or lowball their
offers. Neither of these scenarios
benefits the seller.

2.

“Price
High, Reduce Later” - Be careful
when thinking that you can always reduce the price at a later date. Once you put your home on the market, the
greatest potential for traffic is in the first 30-45 days. By pricing high with the intention of
dropping the price later, you risk losing a lot of potential buyers.

3.

Lower
Proceeds – Unfortunately, when a home is overpriced when initially listed,
it almost always is guaranteed to sell for less than market value. What ends up happening is the seller has
fewer buyers to choose from, zero control because of the time spent on the
market, too high an asking price, and costs to incur to maintain the
property. Because of all of these
negative circumstances, the seller will get the least from their investment
rather than the most.

4.

Helping
your Competition – Why would you want to make your neighbor’s property look
like a better deal than yours? An
overpriced home can actually help your competitors, so it is imperative to scan
the neighboring inventory before listing your home. If you are pricing higher than what is
available around the block, make sure that your property offers assets that
justify this increase.

Remember, making the choice to overprice your listing can
prove to be a timely and costly risk for the seller.

July 29, 2013

Refinancing your home may still be possible with a poor credit score, while you most likely won’t qualify for the lowest interest rate available. Therefore, the main question is can you still refinance on terms that make it worth your time?

Before you begin shopping for rates, start by cleaning up your credit. Begin a history of paying all of your bills on time, try even making more than the minimum payments on your current debt, paying off credit cards, and limit your spending while avoiding the establishment of new credit lines that can improve your credit score shockingly fast.

Your credit score can also quickly be improved by confirming there are not any errors on your report. Furthermore, decreasing your debt-to-income ratio will help your standing among lenders. The total of the monthly mortgage expenses, including payments, taxes, and insurance, as well as any other monthly debt payments, such as auto payments and credit cards, should not surpass 43% of your gross income.

Naturally, having a stable income history, having liquid assets which illustrate your ability to make multiple payments on the loan, and by having established equity in your property as increase your odds of qualifying for a respectable rate.

Keep in mind, 20% down payment is always required to avoid private mortgage insurance (PMI). Also, PMI will most likely cost you between $50 and $200 per month, according to the balance of your loan and PMI rate.

By taking these steps will help maximize your chances of qualifying for a beneficial rate.

Moreover, a hidden advantage you should explore would be government programs, for instance Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP). These programs are free and are designed to help lower the interest rates and your monthly payments.

Government aid programs have been since extended. But you should take advantage of this option because they will all expire December 31, 2013.

January 30, 2013

Most of the real estate buyers face problems deciding on whether
to resort to the mortgage brokers or the mortgage banks. It’s very obvious that
they are on the lookout for the best deal that they can get, but choosing the
right way often takes the better of them in the same way as mortgage
refinancing does. It’s important to understand the difference between the
mortgage brokers and mortgage banks before you choose any one of them for
the fulfillment of your purpose.

Who are mortgage brokers?

If you've heard of freelancing agents, you probably have an idea of
what mortgage brokers basically do. They act as a link between the lenders and
borrowers. They are responsible for finding the lenders some good borrowers and
earn commission from the lenders in exchange. Being freelancing agents,
mortgage brokers are pretty much independent. They work alone. They have
several sources of contacts, which makes it easier for them to carry on with
their jobs as brokers. Mortgage brokers follow a particular routine as they
work on finding data for borrowers. It’s important that you let them know your
plans well so that they can get you the approval as well as make sure you have
the mortgage that
suits your situation best.

Opinions vary with people with many preferring the services of
mortgage brokers. They believe that going to banks isn't going
to bring mortgages as good as the ones they can get through mortgage brokers.
Mortgage brokers are spoken highly of by people as many are known to have made
the approval of applications possible despite bad and fallen credit histories.

Pros and cons of Mortgage Brokers

It’s better to know the pros and cons of mortgage brokers before
you decide on appointing any one of them for your purposes.

Pros

·Your choice of time –With mortgage brokers,
you get the flexibility of setting up appointments at your own time.

·Competitive rates –The rates are very
competitive in the sense that they can save a lot of your hard-earned bucks.

·Find lenders when you need them –Mortgage brokers are
known to find lenders for you even when your credit history has a lot to speak
against you.

·Carry out negotiations –Mortgage brokers take up
the negotiation job with much pleasure to make sure the mortgage payments are
never too heavy.

Cons

·Offshore and small lenders –Lenders offering good
rates are either based outside the country or small enough.

·Lack of responsibility –It is really a matter of
concern that mortgage brokers don’t care if or not people can handle the
mortgages that they are borrowing as higher mortgages would mean better
commissions for the brokers.

The loan officers at the banks are somewhat mortgage brokers
with the only difference that they work for the banks. They do the same things
regarding consulting and helping you decide on the mortgage that suits you the
best. They don’t work independently and are paid by the banks.

Pros and cons of Mortgage Banks

The following pros and cons will help you decide if you can go
for the mortgage banks to get your mortgages:

Pros

·Appointment times are flexible.

·Perks and waivers on appraisal fees
available.

·Security

·Lower costs.

Cons

·You’ve to work out the negotiation all by
yourself.

·Shopping around is necessary.

·Not better than rates offered by mortgage
brokers.

·Credit scores are paid importance to.

Now that you have learned and understood the pros and cons of
both mortgage brokers and mortgage banks, it won’t be difficult for you to make
your choice. It all depends on how well you can negotiate and the benefits that
you’re looking for as you go ahead with your mortgage.

Author Bio: Stephenie Milleris
a prolific writer with specialization on various aspects of finance. Her
articles on debt, mortgage industry, refinance, real estate and personal
finance are valuable guidelines to the readers.

December 5, 2012

The best time for the
owner of a property to get the home loan refinanced is, when the interest rates
on the mortgages are low. Homeowners opt for refinancing, when they start to
face problems in managing the mortgage payments. Another situation under which
homeowners may opt for mortgage refinancing is, when they want to save money on
the mortgage payments. Refinancing is the process in which you will be required
to take out a new home loan, so as to get the terms and conditions of the loan
changed. However, the criteria for you to obtain a refinance are same as that
of taking out any other types of loans.

Determining the right time:

There are
various situations under which you may be required to refinance your home loan.
If you fear that you are going to default on the home loan payments, you may
better opt for refinancing. As the terms and conditions of your loan get
changed with refinancing, it becomes easier for you to pay down the mortgage.
This again helps you to retain your home.

The main idea
associated with refinancing is that it helps in lowering the interest rate and
may also help by lengthening the loan term. Thus, the amount which you will be
required to pay each month in installment, is suspposed to be much lower than
what you were required to pay previously. Therefore, it becomes easier for you
to make the home loan payments.

However still,
the right time for you to refinance your home is when the mortgage market has
various offers, and the interest rates are considerably low. In addition, it is
also important for you to have a good credit score so you can refinance your
mortgage at a lower interest rate. For, even if the interest rate in the
mortgage market is low, it may not be possible for you to get a good offer, if
you have bad credit rating.

Other than the
above if you think that the value of your home has risen quite a bit, you must
have quite a large amount of equity in your home. So, this can be considered to
be one of the best times for you to get your home refinanced: Refinancing your
home is an option which can also be used for consolidating your debts or making
the required home improvements.

Another option
or the best time is, when you are seeing improvements in the source of your income.
So, if you have been able to pay off all of the other debts, like that of the
credit card debts or the student loans and any other such debts, you will see
that the debt to income ratio has lowered quite a lot. If you have a low debt
to income ratio, it may be possible for you to get a refinance mortgage for
quite a low interest rate. Moreover, if the interest rates on the mortgages are
low, you may be able to get the best of the offers.

Furthermore, if
you would want to change the type of the home loan from affixed rate mortgage
to an adjustable rate mortgage or vice versa, then too, you can opt for the
mortgage refinance.

Author bio- Stephenie Miller is a prolific
writer with specialization on various aspects of finance. Her articles on debt,
mortgage industry,refinance, real estate and personal finance are valuable
guidelines to the readers.

December 4, 2012

With so many foreclosed properties on the market these days, there are some real opportunities for careful buyers looking for a home or an investment property. But how can you arrange the financing?When buying a foreclosed property, you can often finance it with a mortgage, the same as a conventional transaction. But that isn't always the case. The best deals usually go to buyers who can put up cash. If you are planning to finance, there are some special programs for both investors and buyers seeking a home for their own use that are worth knowing about.

Distressed properties make up a big chunk of the residential real estate market these days. According to the National Association of Realtors, 29 percent of all previously owned homes sold in February of this year were either foreclosures or short sales, mostly the former. Nearly one-third of all home sales were cash, suggesting that a big chunk of the market is getting snapped up by investors.

The best deals on foreclosed properties are at a sheriff’s auction, which is the first opportunity to buy them once they've been repossessed. However, sheriff’s auctions don’t offer opportunities to arrange financing – you have to pay cash up front. Sheriff’s auctions can also be risky for inexperienced buyers – for example, there’s little opportunity to inspect the property beforehand, so you can’t be sure what you’re getting. You may also find there are issues with liens on the property as well.

There are some investors who will offer private loans, known as hard money loans, for the purpose of purchasing foreclosures at a sheriff's auction, but they will typically look for borrowers who have some experience at this sort of thing.

That being said, there are other opportunities to buy distressed properties that allow you to arrange financing. The main one is on real estate owned properties (REOs), which are homes the bank retained after the sheriff’s sale. These are put on the market much the same as other homes, and you can obtain a standard mortgage for them. You also have the opportunity to inspect the property before purchasing.

There are some special types of financing available for foreclosed homes offered as REOs. Fannie Mae’s HomePath program offers financing on Fannie Mae-held REOs with down payments of as little as 3 percent, no mortgage insurance and no lender-required appraisal. In addition, you can borrow up to $35,000 for repairs and renovations as part of the purchase mortgage. The HomePath program is available to both investors and persons seeking to buy a home for use as a residence.

Freddie Mac's REO program, called HomeSteps, lists foreclosed properties that are available for purchase but does not provide special financing for them.

A similar program is offered by the VA for foreclosed properties it has acquired. VA Vendee Financing is available to both veterans and non-veterans and, like a standard VA mortgage, allows purchases with no down payment required for owner-occupants. Investors can put down as little as 5 percent and multiple investment purchases are allowed.

VA mortgages are also assumable, meaning a new buyer can take over a mortgage held by the previous owner. This can offer a way to get a good deal on a home that is in foreclosure, but has not yet been repossessed, by taking over the current owner's remaining mortgage debt.

The FHA does not have any special financing for its REO properties, called HUD Homes (HUD stands for the Department of Housing and Urban Development, which the FHA is part of). However, you can use a regular FHA mortgage, which allows down payments of as little as 3.5 percent, to buy a HUD home. For fixer-uppers, the FHA’s 203(k) loan program allows you to borrow additional money for renovations and repairs, up to 110 percent of the property’s projected post-improvement value.

FHA mortgages are limited to owner-occupants, but there is an opportunity for investors to purchase and rehabilitate multiunit properties of up to four units, provided that one unit is used as the borrower’s primary residence.

One other opportunity for financing the purchase of a home in foreclosure is to contact the current property owner and try to arrange a sale before the foreclosure is finalized. Called a short sale, this allows the owner to walk away from the property with no further damage to their credit and lets the bank avoid the costs associated with repossessing the property.

You can often get a better price than on an REO, although negotiating a price the bank will accept can be a drawn-out process. Even so, short sales are increasingly common and currently account for over one-third of all distressed property sales.

A short sale purchase can be financed with a regular mortgage, the same as other home purchases. However, realize that with the length of time it can take to close a short sale – often several months – you probably won’t be able to lock in an interest rate for the whole time. Also, remember that you don’t have to get your financing from the same lender that holds the current mortgage on the property – in fact, you may find it advantageous to go with a lender who is not involved in the sale itself.

November 27, 2012

Been thinking about buying a home? Well, maybe you should put it on your holiday shopping list this year.

Although the holidays tend to be an off-season for the real estate and mortgage industries, there are some good reasons to buy a home toward the end of the year. Although if you’re going to do it, you need to get started now.

For one thing, the fact that the holiday season is a slow one for the housing market works in your favor. There are fewer people shopping for a home at that time, so you have less competition bidding for the good properties.

The asking price on some homes may have been reduced in price after they did not sell during the busier fall and late summer seasons. In fact, home prices are typically at their lowest of the year in December, although broader trends must still be taken into account.

People showing their homes at that time of year are often hopeful of getting a sale nailed down by year’s end, so they may be more amenable to negotiation. The fact that it’s the holiday season also tends to put people in a more generous mood as well.

It’s also a slow time for real estate agents, who may be keen for any business they can find and more available to focus on you as a customer. The fact that business is slow for both real estate agents and mortgage lenders during the holiday season often means you can get your transactions processed more quickly than at other times of year, because they’ve got fewer deals to handle.

Lenders may also be more willing to shave a few points off mortgage offer in order to make a deal, both because business is slow and also because they may want to get the loan on their books before year’s end.Tax considerations

Closing on a home before the end of the year also means you can deduct certain settlement costs on your taxes for that year. These include any pro-rated property taxes and prepaid mortgageinterest paid at closing. Since discount points are a form of prepaid interest, you can deduct those as well for the year in which you bought the home, but only on a home purchase mortgage – tax deductions for points paid for refinancing a mortgage must be amortized over the life of the loan.

This brings up a potential downside to buying a home late in the year, which you also need to be aware of. For many homeowners, mortgage interest is what allows them to itemize deductions on their tax returns, rather than just paying the standard deduction. This means they can start including smaller deductions they may not have been able to get credit for in the past, such as for certain work-related expenses, home improvements or charitable donations.

However, if you’re not itemizing deductions already, buying a home late in the year may mean that you won’t pay enough in interest to be able to itemize deductions on your next tax return – including those other settlement costs you otherwise might have been able to deduct. Remember, if your total deductions don’t add up to at least your standard deduction ($5,950 for a single taxpayer, $8,700 for a head of household or $11,900 for a couple filing jointly for 2012), it’s not worth itemizing.

There can also be a few other downsides to buying a home over the holidays. Real estate agents may be on vacation, since it’s already a slow time for them. There may be fewer open houses where you can visit homes for sale. Your own schedule may be crowded with your own holiday preparations and activities.

That being said, there are still some pretty good deals to be had by buying a home over the holidays. If the timing works for you, a new home can make a very nice holiday present for you and your family.

About Me

Steven A. Milner has nearly 30 years of experience in the Mortgage Industry, having started his career as a Loan Officer in 1981 in New York. Currently, Mr. Milner is the Founder & CEO of US Mortgage Corporation, the highly esteemed NYS Licensed Mortgage Banking corporation he founded in 1994.
Mr. Milner spent the first 18 years of his professional career as a Math Teacher on Long Island. It was not until 1981, when Mr. Milner first took an interest in the mortgage industry by pondering over his own refinance. Having an immediate affinity for the Mortgage industry and the foresight to see the potential it would yield, Mr. Milner in 1982 started working part time after school as a Loan Officer for a local Mortgage Banking firm on Long Island.
US Mortgage Corporation is a multi-state Licensed Mortgage Banking Corporation that was founded by Steven A. Milner nearly two decades ago.